Corporate Governance Committee Working Principles

1. PURPOSE

The purpose of the Corporate Governance Committee is:

·       To work on the company's compliance with corporate governance principles,

·       To work on determining, evaluating, training, and rewarding the qualifications of board members and senior executives,

·       To work on establishing a transparent system regarding compensation, rewards, and performance evaluation, and determining policies and strategies in this regard, as well as on career planning,

·       To assist the board of directors by working with the shareholder relations unit on public disclosure issues,

·       To work on developing and implementing risk management systems,

In addition, the Committee will review and evaluate the systems and processes that the company has created or will create in order to implement management practices that improve the company's performance, and will make recommendations.

2. GROUNDS

This document has been created within the framework of the provisions of the Capital Market Legislation.

3. AUTHORITY AND SCOPE

The Committee, selected and authorized by the Board of Directors, shall:

·       Make recommendations to the Board of Directors regarding the definition of Board membership and the qualifications for membership,

·       Develop recommendations regarding the number of Board members and executives, and monitor and evaluate their effectiveness,

·       Establish the company's ethical codes,

·       Work in coordination with the Investor Relations Unit,

·       Establish the Company Information Policy and be responsible for its implementation,

·       Conduct the Board of Directors' annual corporate governance review and submit it for the Board of Directors' approval.

The duties and responsibilities of the committee do not negate the responsibilities of the Board of Directors under the Turkish Commercial Code. The committee acts within its own authority and responsibilities, makes recommendations to the Board of Directors; however, the final decision-making responsibility always rests with the Board of Directors.

4. STRUCTURE OF THE COMMITTEE

• The Committee is established in accordance with the Company's articles of association and the Capital Markets Board regulations.
• All Committee members are selected from among independent members of the Board of Directors. If this is not possible, the Committee Chairman must be selected from among independent members of the Board of Directors.
• At least one person on the Committee serves as an expert with experience in accounting, finance, auditing, law, management, etc.
• The Committee consists of at least two members.
• If necessary, experts who are not members of the Board of Directors may also be assigned to the Committee.
• The Committee meets at the Company's headquarters at least every three months, and if necessary, without waiting for this period.
• The Committee submits its findings and recommendations regarding its duties and responsibilities to the Board of Directors. Decisions taken at the meetings are put in writing, signed by the Committee members, and kept in an organized manner.

5. DUTIES AND RESPONSIBILITIES

·      The Committee identifies whether corporate governance principles are being implemented, and if not, the reasons why, and any conflicts of interest arising from non-compliance with these principles, and makes recommendations to the Board of Directors to improve implementation.

·      It oversees the work of the shareholder relations unit.

·      The Committee ensures that the importance and benefits of corporate governance principles are established and adopted within the company. It evaluates whether an efficient and effective "corporate governance" culture has been established in the company.

·      The Committee makes recommendations to the Board of Directors regarding the healthy functioning of the infrastructure for management practices aimed at improving company performance, their understanding and adoption by employees, and their support by management.

·      The Committee works on establishing a transparent system for identifying suitable board of directors candidates and senior management candidates appropriate for Board of director and senior management for the Board of Directors and senior management, and developing policies and strategies in this regard.

·      The Committee determines the compensation principles for Board members and senior executives, taking into account the company's long-term goals.

·      It determines the criteria that can be used in compensation in relation to the company's and member's performance.

·      It submits its recommendations to the Board of Directors regarding the compensation to be given to Board members and senior executives, taking into account the degree to which the criteria are achieved.

·      The Committee develops recommendations regarding the number of Board members and executives.

·      The Committee obtains the opinions and recommendations of the Human Resources unit if deemed necessary.

·      It works to identify risks that may jeopardize the company's existence, development, and continuity early on, to take necessary measures regarding the identified risks, to implement them, and to manage the risk.

·      It develops and reviews risk management systems.

·      It participates in the design, selection, implementation, and pre-approval process of risk measurement models, which are a fundamental tool in the risk management process; regularly reviews the models; conducts scenario analyses and makes necessary changes;

·      It requests information, opinions, and reports from relevant units when deemed necessary to ensure the effective performance of the risk monitoring function;

·      It monitors and evaluates the effectiveness and results of risk management activities throughout the company.

6. REPORTING RESPONSIBILITY

• The Committee ensures that the Board of Directors is informed on matters within its authority and responsibility.
• The Committee keeps a written record of all its work.
• The Committee submits its work and recommendations to the Board of Directors in the form of a report.
• The Committee monitors developments in the literature on corporate governance and investigates their impact on the Company's management.
• The Committee performs other activities requested by the Board of Directors that can be evaluated within the scope of corporate governance.

7. EFFECTIVE DATE

The Committee's duties and operating principles, and any changes thereto, shall enter into force upon the decision of the Board of Directors.